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Monthly Archives: June 2019

For all you procrastinators out there (and I count myself as one of the best) listen up! VCIA’s Annual Conference “early bird” rates are about to expire on June 30th. That means, of course, you will be paying more to learn and network with 1100 captive professionals from around the US and the world. And none of us like doing that.

Don’t take my word on it – look, here it is in black and white:

Registration Type

Early Price

Late Price

Full Pass: Member

$750

$825

Full Pass: Non-member

$1300

$1380

Networking: Member

$465

$515

Networking: Non-member

$890

$940

So, before the early bird changes into an angry bird, get on it! Click here to register today.

The fact that we now have a burgeoning space industry opens up opportunities for the insurance world. Most insurance companies offer some type of Space and Satellite Insurance which covers things like satellite launch and in-orbit, contingency, in-orbit third party liability, or some combination thereof. But with space tourism becoming a reality in the not-too-distance future, captive insurance has an opportunity to play a role in the risk management of our last frontier.

The global banking firm UBS believes there will be very lucrative ramifications from the space flight efforts currently led by Virgin Galactic, SpaceX and Blue Origin, and stated that in a decade high-speed travel via outer space will represent an annual market of at least $20 billion and compete with long-distance airline flights. Space tourism will be a $3 billion market by 2030, UBS estimates.

UBS pointed to SpaceX’s plans to use the massive Starship rocket it is building to fly as many as 100 people around the world in minutes. SpaceX said that Starship would be able to fly from New York to Shanghai in 39 minutes, rather than the 15 hours it takes currently by airplane – pretty cool. And even though space tourism is still nascent, UBS said they believe the sub-sector will become mainstream as the technology becomes proven and cost falls.

The legal risk of orbital space tourism is uncharted territory, and the liability risks to these companies could be huge. Under current regulation, commercial passengers will have to sign an “informed consent” form to confirm that they recognize and accept the risks. This provision has been enshrined in US law by the Commercial Space Launch Amendments Act 2004. Such liability waivers remain untested in the courts.

Although there are large insurance firms looking at space tourism, it seems that there is a yawning gap for the liability coverage of the space firms. Captives have always done well with filling this void with targeted, bespoke coverage. So, brush off your old Star Trek DVDs and let’s hope that we have a panel at the VCIA conference in the next ten years devoted to the extraterrestrial!

For all you Trekkies out there we have the next best thing to Captain James T. Kirk: for our closing luncheon on Thursday at the VCIA Annual Conference the week of August 5th we have former astronaut Mike Massimino as our special keynote. He is a recurring character on The Big Bang Theory, a professor at Columbia University, the first person to tweet from space, and a New York Times best-selling author. Mike will speak of pursuing his passion and tell incredible stories about his experiences in outer space manning space missions. Having one of the most dangerous jobs in the world, Mike will speak of the teamwork and problem-solving skills needed to train for and accomplish one of NASA’s most difficult space missions. Don’t miss this fun closing event!

When I talk to folks who come to the VCIA annual conference every year, I always ask them what they find most compelling about it. Often cited is the education provided by our VCIA panelists who represent some of the most prestigious organizations in the world. Sometimes it is that the conference is a great source for captive career development and networking or earning CPE / CLE / ICCIE credit.

One of the most compelling reasons to come to our conference is the peer-to-peer learning that attendees receive from the almost 1100 captive professionals that come each year. This year we are trying to enhance that relationship. We are organizing peer groups to come together and share thoughts, issues and questions in what we are calling Learning Circles.

In a Learning Circle, you’ll share your learning experience with up to 8 peers, who’ll do the same for you. An appointed Ambassador will act as a guide to help facilitate and support the process. Your Learning Circle is an adventure you’ll experience together on a mutual quest to dive deeper and apply the vibrancy of ideas and innovations you’ll encounter at VCIA’s Annual Conference.

The goal is simple: Enrich your VCIA journey with insights and experiences from your fellow Learning Circle members. Come prepared with subjects you would like to discuss. Through this process, you’ll discover the value of gaining new perspectives and ideas from fellow circle participants while developing connections with new peers.

So, come join us for the VCIA Annual Conference August 6 – 8th (with Captive Immersion August 5th), and think about signing up for one of our Learning Circles – you will not regret the knowledge you can gain, and the new friendships you will make!

I read an article recently in Risk & Insurance about three trends that will disrupt the insurance industry in the next decade. The article interviewed Assaf Wand, CEO and co-founder of Hippo Insurance, about what trends he expects to play out over the next five to ten years. And while there has been much written about these types of trends (including here in this wonderful blog) Wand reminded me why captive insurance really surfs these trend waves very well.

Nontraditional players will enter the market in force.

Sure, the article is focusing on the news that retailers like Amazon and Walmart will become more active in the insurance world with their huge presence and direct connection with their consumers. Things like travel insurance, shipping, potentially marine on the commercial side could be the next frontier for these behemoths according to Wand. Captives, however, are the original “nontraditional” players in the insurance market going back decades. And looking ahead, captives are well positioned to take advantage of emerging opportunities such as automakers insuring risks from driverless cars.

An explosion of data will change the underwriting equation.

“Data sources are going to keep on multiplying on an ongoing basis, and we don’t necessarily know what those sources will be. [Insurers will] become much more data-centric,” Wand said in the article. That is certainly true. One of the primary tenets of the captive insurance industry is that the data from the risk management feeds directly to the captive owner(s). Owning and understanding one’s data is paramount to the success of the captive and has provided the impetus for lowering risk profiles and thereby cost savings. New technologies, including AI, will give captive owners that much more power to contain risk and save money.

Insurers will shift value to more proactive risk management services.

This is not a new trend in the captive insurance industry: this has been the KEY to its success for over 35 years. As the article rightly points out, in most insurer-insured relationships, there are few touch points between binding a policy and policy renewal besides a claim, should one occur. Here Wand points out the “new” approach that the traditional insurance industry must adopt in order to survive: create more touch points and find ways to add more value to that relationship in the form of risk management services. This enhances the customer experience and also reduces the likelihood of a claim. Fewer claims should ultimately mean more profits for the insurer and cheaper policies for the consumer.

“The shift will be a refocus back on the customer,” Wand said. Sound familiar?

Some of the strategies outlined are things the captive insurance industry needs to keep focused on as well. New insurance technologies include the use of aerial imagery to identify discoloration on roofs well in advance of a leak, so that a roofer can come assess and repair before anything goes wrong. Or the use of weather data to ascertain the strength of storms heading your way in order to send in specialists to help strengthen vulnerable spots on your property.

Essentially, the traditional insurance marketplace needs to adopt a more “captive” approach in the next decade. Maybe they will, maybe they won’t. Captive insurance will always be one step ahead of the traditional side – after all, the connection between the insureds and insurers can’t get any closer!

Come hear more about insurance trends at the fast approaching VCIA Annual Conference August 6 – 8th (with Captive Immersion August 5th). Laura Drabik, Group Vice President of Business Innovation for Guidewire Software will speak about disruption, technology and innovation in the insurance industry at our opening general session, and it is sure to be fascinating!